GE to Seek $6 Billion in Australian Contracts Amid Resource Boom

GE opened a $100 million service and maintenance facility in Perth last year. Photographer: Fabrice Dimier/Bloomberg

April 20 (Bloomberg) -- General Electric Co. is seeking $6
billion in contracts out of Australia by the end of the decade
as it taps the country’s growing role as a supplier of liquefied
natural gas, iron ore and wind power.

“We see a really significant opportunity set here,” John
Anderson, senior regional executive overseeing GE’s energy
business in Australia, New Zealand and Papua New Guinea, said in
a telephone interview from Melbourne.

Growth areas such as Australia may account for half of GE’s
industrial revenue by 2020, up from 37 percent of its $94
billion in industrial sales last year, the company has said.
GE’s sales in Australia of equipment for customers ranging from
energy producers to mining companies rose 67 percent to almost
$3 billion last year, outpacing China and Latin America.

The Fairfield, Connecticut-based company is involved in all
the LNG projects being built in Australia and will bid for more
contracts as the industry expands, Anderson said in his first
interview since accepting the new role in January. With $180
billion of LNG projects advancing, Australia is set to surpass
Qatar as the largest exporter of the fuel by the end of the
decade, according to Sanford C. Bernstein & Co.

“There’s a significant prize to be had for both
maintaining that position and expanding it,” said Anderson, who
received degrees from the University of Western Australia and
Curtin University and returned to Australia following a 25-year
career at BP Plc mostly in the U.K. and the U.S.

BG Group Plc, ConocoPhillips and Santos Ltd. are going
ahead with more than $50 billion of LNG developments on the
coast of central Queensland in Australia’s northeast for fuel
exports to Asia. Those projects may expand.

Ichthys, Apache

GE opened a $100 million service and maintenance facility
in Perth last year that will also train workers for the oil, gas
and mining industries and may start a similar center on the east
coast, he said. Keeping resources projects on schedule and
budget amid a contest for labor will be a challenge for the
industry, he said.

“There’s enormous pressure to get that right,” according
to Anderson.

GE forecasts sales will rise as much as 25 percent this
year in fast-growing regions such as Australia, Latin America
and Africa. The company supplies natural gas compression
systems, power-generation equipment and wind turbines, among
other equipment and services.

Australia’s expansion is being driven by China, the
nation’s biggest trading partner, which is buying up iron ore,
coal and natural gas as millions of people in the world’s most
populous nation move to urban centers.

‘Feeding Frenzy’

The boom has sparked a “feeding frenzy” for companies
such as GE that provide equipment and services to LNG and mining
projects, Peter Strachan, a resources analyst at StockAnalysis
in Perth, said by phone today.

“There’s going to be a hiatus toward the end of the
decade,” he said. “But there is certainly three or four years
of strong activity. There are plenty of projects going ahead
that could keep the momentum rolling.”

GE’s energy division is expected to double its workforce in
Australia and New Zealand to 1,000 this year from about 500 in
2007, Anderson said.

GE has won more than $1 billion of work to supply equipment
and services to the Inpex-led Ichthys LNG project, a $150
million contract for Apache Corp.’s Julimar gas project and an
agreement to supply gas turbines for Fortescue Metals Group
Ltd.’s Solomon mine project. Chevron’s Gorgon LNG venture off
northwest Australia awarded GE more than $1.1 billion of
contracts, GE said in 2010.

A group including GE also received a contract to supply 22
of the company’s wind turbines for the 55-megawatt Mumbida wind
farm in Western Australia, GE said last year. The pact marked
the first use of GE wind turbines in Australia.